Bill English MP
National Party Finance Spokesman

4 August 2008

Labour scores impressive own goal on debt

National Party Finance spokesman Bill English says Labour has scored an impressive own goal in its rush to attack National’s plan to significantly boost infrastructure investment.

"In the last Budget, Michael Cullen's spending plans resulted in a $10.2 billion increase in the cash deficit out to 2011/12. To pay for this, he is going to raise gross debt by a total of $2.3 billion and is going to pay for the rest by selling Crown financial assets.

"As a result, the Government's net core Crown debt is projected to rise over the next few years.

"Where was Dr Cullen's anti-debt hysteria then? In fact, he quietly slipped through these changes without mentioning them in his Budget speech.

“Labour is now claiming the sky is falling because National plans to borrow a modest amount more to build some of the infrastructure this country desperately needs.

“This is a classic case of Michael Cullen believing others should do as he says, not as he does.

"In his earlier Budgets, Dr Cullen declared that anything under 30% of GDP was a prudent level of debt.

"By that standard, National's plan to see gross debt average at around 22% of GDP over the next 10 years is ultra prudent.

"OECD figures show that New Zealand has the third lowest gross debt-to-GDP ratio in the developed world. We don't have a debt problem, we have a growth problem and a productivity problem.

“Raising productivity is the key to lifting incomes, providing world-class public services, and helping our families through the tougher times.

“National’s plan will clear the infrastructure gridlock that’s holding our country back.”

ENDS

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